Progressive Leasing will pay $175 million to settle charges with the Federal Trade Commission (FTC) that its policies were misleading to customers, according to an April 20 release by the FTC.
According to the charges, Progressive, which traffics in rent-to-own payment plans in numerous stores around the country, was telling customers that payment plans for the items they bought, like furniture or jewelry, were the same as cash and had no interest.
The FTC said that was not the case and that customers frequently ended up paying much more than the sticker price, sometimes as much as double if they made all their scheduled payments.
The complaint alleged that customers would see the rent-to-own agreements with Progressive, but not be able to see their actual payment amount on the agreement unless they clicked an easy-ti-miss drop-down arrow on the page.
The FTC complaint said Progressive was aware of the confusion about their plans for months, as evidenced by the over 15,000 complaints about their services in just a period of a year and a few months.
Under the settlement, the $175 million from Progressive will go toward paying refunds to customers who were affected.
In addition, Progressive Leasing will now have to disclose in up-front, obvious terms the exact amount a customer will have to pay with a plan. The company will also have to get customers’ express, clear consent before billing them for services.
The company will also now have to look at third-party retailers offering its plans to make sure the payment guidelines are laid out clearly there, as well.
The Commission voted 3-2 to authorize filing the complaint and the proposed final order. Commissioners Rohit Chopra and Rebecca Kelly Slaughter dissented. Slaughter issued a statement of dissent.
The FTC ended up filing the complaint and the stipulated final order in the U.S. District Court for the Northern District of Georgia.
As the coronavirus pandemic continues, the FTC has seen a massive surge in complaints of fraud.